G.R. No. 47495; August 14, 1941
THE TEXAS COMPANY (PHIL.), INC., petitioner, vs. TOMAS ALONSO, respondent.

FACTS

On November 5, 1935, The Texas Company (Phil.), Inc. filed a complaint in the Court of First Instance of Cebu against Leonor S. Bantug and Tomas Alonso to recover P629, the unpaid balance of Bantug’s account under an agency contract. Tomas Alonso had signed a surety agreement on August 12, 1929, binding himself jointly and severally (in solidum) with Bantug for the faithful performance of the agency contract, with liability not exceeding P2,000. Leonor S. Bantug was declared in default. Tomas Alonso answered, raising a general denial and special defenses that he was made to believe he was merely a co-security with Vicente Palanca and that he was never notified of the acceptance of his bond by The Texas Company. The trial court rendered an amended judgment on February 1, 1938, holding both Bantug and Alonso jointly and severally liable for the sum. On appeal, the Court of Appeals modified the judgment, holding only Bantug liable and absolving Alonso. The Texas Company then filed this petition for review by certiorari.

ISSUE

Whether the bond executed by respondent Tomas Alonso was a binding obligation, or merely an offer of guaranty requiring acceptance and notification thereof to the surety to become effective.

RULING

The Supreme Court AFFIRMED the decision of the Court of Appeals, absolving Tomas Alonso from liability.
The Court held that the bond in question was executed by Alonso at the request of the petitioner by virtue of Clause 15 of the agency contract, which provided for “Additional Security.” This clause stated that the agent shall, whenever requested by the Company, furnish further guaranty or bond, in such form and amount and with such sureties as shall be satisfactory to the Company. The Court found that, under this clause, the bond was subject to the Company’s approval, and the logical implication was that if the Company was satisfied with the bond, notice of its acceptance or approval should be given to the surety. The Court of Appeals found, as a fact binding upon the Supreme Court, that there was no evidence showing Alonso had knowledge of any act by the Company amounting to an implied acceptance of his bond. Therefore, the bond constituted merely an offer or proposition for a guaranty, which did not become a binding obligation until accepted and until notice of such acceptance was given to or acquired by the guarantor. Since no such acceptance was communicated to Alonso, he could not be held liable.
The Court distinguished between an offer of guaranty (which requires acceptance and notice) and a direct or unconditional promise of guaranty (where notice of acceptance is not necessary if not made a condition). The bond in this case fell under the former category. The decision in National Bank vs. Garcia (47 Phil. 662) was applicable, not National Bank vs. Escueta (50 Phil. 991), as there was no evidence of acts implying acceptance.
DISSENTING OPINION (Ozaeta, J., with Moran and Horrilleno, JJ., concurring):
The dissent argued that the bond executed by Alonso on the same date and within the same document (Exhibit A) as the agency contract was the original guaranty provided therein, not an “additional security” under Clause 15. Clause 15 referred to a “further guaranty or bond” in addition to the one “herewith provided.” Therefore, Alonso’s bond was not a mere offer but an integral part of the executed contract, requiring no separate acceptance or notification. The dissent concluded that the Court of Appeals’ reasoning was erroneous and that the trial court’s judgment holding Alonso jointly and severally liable should be reinstated.